Government also raised budget allocation for Agriculture Ministry by 6 per cent to Rs 51,026 crore for 2017-18 from Rs 48,072 crore (revised estimate) of this fiscal.

Aiming to double farmers’ income by 2022, the government on Wednesday increased agri-credit target by 11 per cent to Rs 10 lakh crore for next fiscal and announced two dedicated funds with a corpus of Rs 13,000 crore to promote micro irrigation and dairy processing.

Government also raised budget allocation for Agriculture Ministry by 6 per cent to Rs 51,026 crore for 2017-18 from Rs 48,072 crore (revised estimate) of this fiscal. The total allocation for agri and allied sectors is Rs 58,663 crore for next fiscal, up from Rs 52,821 crore.

Presenting Union Budget 2017-18 in Parliament, Finance Minister Arun Jaitley set the target of achieving 40 per cent coverage of farm land under the new Pradhan Mantri Fasal Bima Yojana (PMFBY) and earmarked Rs 9,000 crore for next fiscal.

“For a good crop, adequate credit should be available to farmers in time. The target for agricultural credit in 2017-18 has been fixed at a record level of Rs 10 lakh crores,” Jaitley said in the Budget speech.

The government has set aside Rs 15,000 crore to provide short term crop loans at subsidised interest rates to farmers.

The agri-credit target for the current fiscal is Rs 9 lakh crore, which is likely to be surpassed.

Jaitley said the government will make special efforts to ensure adequate credit flow to underserved areas—the eastern states as well as Jammu and Kashmir.

Farmers get short-term crop loans of up to Rs 3 lakh at subsidised interest rate of 7 per cent per annum. For prompt repayment, they get an extra incentive of 3 per cent, making an effective interest rate at 4 per cent.

Jaitley said the agriculture sector is expected to grow at 4.1 per cent in the current fiscal on good monsoon.

On protecting farmers against natural calamities, he said: “The Fasal Bima Yojana launched by our government is a major step in this direction. The coverage will be increased from 30 per cent of cropped area in 2016-17 to 40 per cent in 2017-18 and 50 per cent in 2018-19.”

He said the budget allocation for next fiscal to implement this scheme has been kept at Rs 9,000 crore. The allocation for this year is higher at Rs 13,240 crore due to settlement of earlier claims.

Laying thrust on better water use efficiency in the farm sector, Jaitley informed that a long-term irrigation fund has already been set up in NABARD, the corpus of which has been recently raised to Rs 40,000 crore.

Now, he said, “A dedicated Micro-Irrigation Fund will be set up in NABARD to achieve the goal, ‘Per drop More crop’. The Fund will have an initial corpus of Rs 5,000 crores.”

Stating that dairy sector is an important source of additional income for farmers, Jaitley announced creation of separate ‘Dairy Processing and Infrastructure Development Fund’ in NABARD with a total corpus of Rs 8,000 crore over three years and initial fund size of Rs 2,000 crore.

Jaitley also said the government will prepare a model law on contract farming which will be circulated to state governments.